What are the top three financial issues employees want support with – and how can HR help?

Businesses are waking up to the fact that financial concerns should play a central role in their overall wellbeing strategy. But what money worries do your people want support with?

As income providers, employers hugely affect the financial lives of their employees – and the link between financial strain and mental and physical health is now widely recognised and known to impact the workplace.

Employees have also made it clear that they would like to see their organisations offer education and tools that will help improve financial habits, knowledge and wellbeing. In Neyber’s DNA of Financial Wellbeing 2018 Book two more than half (55%) of respondents said they would like to receive financial support and information in at least one area.

But where should businesses begin when it comes to helping their workforce with the vast, overwhelming world of finance?

Here are the top three financial issues that employees are wanting more support with and a few pointers for how HR professionals can help.

1. Long-term financial planning including pensions and investments

20% of employees who responded to Neyber’s survey would welcome assistance with financial planning for the future and 15% would like support with making investments.

It’s promising to see workers wanting help in these areas, especially with growing concerns about pension contributions being inadequate for affording a comfortable lifestyle in later years.

This is particularly true of young people. A 2017 survey of 500 16-21 year olds conducted by NOW: Pensions revealed that 66% are not currently contributing to a pension. In 2020, auto-enrollment will be extended to 18 year olds and employers will play a key part in encouraging young people to remain opted in.

How can HR help?

Many employees struggle to engage themselves with pension planning – and part of the reason for this is poor communications by employers.

A lot of the current literature is peppered with financial jargon and acronyms (SIPPS, UPFLS, AVCs, LISA) that easily baffle most non-experts. Therefore an obvious first step is to ensure all communications about pensions are clear, to the point and jargon free.

Changing people’s behaviours around pensions and investments is particularly difficult because of ‘present bias’ – a behavioral economic term for the tendency to favour a more immediate reward at the expense of a longer-term benefit.

A mixture of face-to-face financial education workshops, online resource hubs and savings portals will help to attract attention and retain engagement.

We cannot expect employees to be presented with new and improved literature and have immediate buy in. Using multiple communication channels – such as presentations, events, one-to-one sessions and coaching – are important at first to raise awareness and educate.

Later on, the use of digital tools and dashboards to help employees better visualise their pension fund will encourage them to save more.

Remember that, as well as pensions, employees may also be interested in learning about investing money for other future events, for example buying a first home. Presenting employees with the financial options available for a range of long-term saving needs is good practice.

2. How to create good savings habits

While 15% of employees across all age groups are seeking advice on becoming better savers, it is a particular need that young people are looking for (27% of 18-24 year olds).

Putting savings aside not just for retirement but also for a new home, unexpected expenditure and more shorter-term goals such as holidays – rather than relying on credit – is a good financial habit that many aspire to develop.

Young people in particular have much to contend with when it comes to savings. They are expected to live longer and have to rely more on their own savings in retirement.

They are more likely to experience financial risk due to stagnant pay, economic instability and a decrease in welfare benefits. And their financial choices are set to be more complex due to new products and services regularly entering the market.

How can HR help?

There are an array of incentives that businesses can offer their employees to help them with saving.

Save As You Earn schemes allow employees to buy shares with savings at a fixed price. Share incentive plans are a tax efficient way for employees to become shareholders in the business they work for. And workplace ISAs are an easy way for workers to invest in a stocks and shares ISA with added perks and discounts.

But again, employers won’t receive high uptake of these services without effective, timely communications. A mixture of face-to-face financial education workshops, online resource hubs and savings portals will help to attract attention and retain engagement.

3. Everyday management and budgeting

Support on how to deal with day-to-day money management and budgeting for home finances were both sought out by 11% of employees. Considering that 50% of people are having to borrow money to cover basic needs, this is a key area for employers to focus on to help reduce more immediate money worries.

How can HR help?

A good approach is to split topics into sizeable chunks – eg eliminating debt, credit scores, borrowing advice, tips & tricks for saving money – and set up monthly or bi-monthly lunch and learn sessions that employees can attend voluntarily.

Employers can either recruit members of the financial team or enlist an external financial professional to lead the sessions. Don’t forget to ensure plenty of communication is sent out in the run up to each session to improve uptake.

A significant proportion of today’s workforce is experiencing some form of financial strain.

Most companies are likely to have at least a few employee benefits that can help employees save a bit of money, such as buying or selling holiday, cycle to work schemes, retail discounts, season ticket loans, healthcare savings cash plan and childcare vouchers/support.

But communicating these benefits on the first day of a new employee’s job and never again is unlikely to get people to sign up.

Be mindful to regularly outline the opportunities available – perhaps in monthly meetings or engagement sessions – and be specific about the savings each of these offerings could give employees.

What does your workforce need support with?

Getting employees to feel more comfortable, informed and equipped to deal with day-to-day and long-term money matters is not just a nice thing to do.

A significant proportion of today’s workforce is experiencing some form of financial strain – and the repercussions on their wellbeing and performance at work is being felt by many employers, whether they know it or not.

The above are just a few of the financial areas that it may be worth prioritising when developing a financial wellbeing strategy. But each workforce is different and it is important for HR teams to consider what their own employees need before making a start on (or refreshing) their own financial wellbeing offering.

About Becky Norman

Becky is Editor of HRZone and Trainingzone, global online communities of people working in the HR and L&D industries. Becky works closely with leading HR and L&D practitioners and decision makers to ensure the publications offer a rich source of real-world insight and fresh advice to their audience.

HR and L&D professionals today must adapt to a complex mix of challenges caused by ongoing business disruption, technological advancements, a changing political landscape, varied employee needs and more. Becky aspires to make HRZone and TrainingZone the destinations for professionals to seek guidance, analysis and opinion on how to tackle these challenges and continue to deliver value.

Replies

A great article, thanks Becky. It's positive to hear that younger employees are becoming more engaged with long-term savings initiatives. But employers must do more to make the savings on offer as part of their benefits more inviting to employees. Many of these employees find themselves torn between fulfilling their need for instant gratification (a shiny new car on lease, an experiential holiday, the latest tech etc) and the niggle in the back of their mind that they should really be putting something aside for a rainy day!

It's up to employers to ensure that employees are well educated in financial matters and therefore able to achieve both through better financial planning.